Ten’s time for some jam-packed Murdoch action

Ten Network
’s new acting chief executive,
Lachlan Murdoch
, is expected to move quickly to cut costs at the television and outdoor advertising group and find a solution to the low ratings of its all-sport digital channel, One, and the new evening news programs on the main Ten channel.

Mr Murdoch, who stepped up from a non-executive directorship of Ten when chief executive
Grant Blackley
was fired on Wednesday, was not available for comment yesterday.

But media analysts and buyers said Mr Murdoch, who has spent most of his time at Ten’s Sydney head office since he joined the board in December, had clear ideas on how to tackle the company’s ballooning costs and lift its share of viewers and TV advertising revenue.

Mr Murdoch was expected to address the key issues outlined in a document prepared by James Packer’s Consolidated Press Holdings soon after its $260 million raid on the Ten share register in October.

Mr Packer later sold half of his 17.9 per cent stake in Ten to Mr Murdoch. Around the same time, iron ore billionaire Gina Rinehart spent $166 million to buy 10 per cent of Ten. The trio joined the Ten board in December, along with Paul Mallam, a nominee of Bermuda-based Australian media baron Bruce Gordon, who owns 14 per cent of Ten.

The Consolidated Press document outlined the decline in Ten’s earnings and earnings margin since 2005, when it was the most profitable free-to-air TV network.

It described Ten’s digital channel strategy as “flawed" and criticised its move away from its core target market of people aged 16 to 39, a move it said would be accelerated by the launch of 6pm With George Negus and state-based news programs at 6.30pm.

Analysts said the news programs and Eleven, the youth-orientated digital channel launched on January 11, would lift Ten’s TV costs from $639 million in 2009-10 to about $710 million in 2010-11 and $730 million in 2011-12.

Related Quotes

Company Profile

Consolidated Press also claimed Ten had “failed to execute a meaningful online strategy", criticised its dividend performance and “numerous layers of management", and said its $400 million investment in the Eye Corp outdoor ad division had failed to generate an acceptable return.

“Murdoch agrees with all of the points raised in the Packer document," said one source. “He and the board are working their way through each of the points raised."

On Tuesday, Ten chairman Brian Long said the board would conduct “an immediate strategic review of the company’s operations".

Mr Murdoch was leading the review and would continue to lead it after a new chief executive was hired. Mr Long said Mr Murdoch was not a candidate for the job.

Sources said Mr Blackley’s dismissal had been discussed by Ten’s directors for about a month but was only finalised on Wednesday after they reviewed the company’s projected results for the six months to February 28.

Ten said on Wednesday its February-half earnings would be down 12 per cent to $103 million.

“The numbers the board saw were shocking," said one source. “The new directors wanted immediate action."

Ten said yesterday it had replaced a $400 million cash advance facility that was due to expire in April with a new $350 million facility.